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Lawyer here - As i explained last time we had a variant of this thread (see comment history if you are interested), this is a very complicated area that people

Lawyer here - As i explained last time we had a variant of this thread (see comment history if you are interested), this is a very complicated area that people try to make very simple. It doesn't have to be complicated, mind you, but right now the way the law is written is basically: 1. Transmitting sports betting info between states is a federal crime unless it's legal in both states (18 U.S.C. § 1084(a)) 2. The CEA regulations ban contracts that are illegal under state law (17 CFR 40.11) 3. Other forms of gambling/betting/contracts that are not sports are generally a-ok. 4. This is not a case of first impression, it's just getting relitigated because Kalshi doesn't want to follow the actual law. This has actually been pretty settled law for a long time, with new flareups maybe once a decade. Kalshi is just hoping to be treated like Uber was. The third circuit's decision is pretty clearly "out there" in terms of existing caselaw. However, this will end up at SCOTUS, and everything until then just doesn't matter. That will be a coin flip even though it shouldn't be

0xbadcafebee 19d ago
> because Kalshi doesn't want to follow the actual law Correction: because the federal government doesn't want Kalshi to follow the actual law. CFTC ordered Kalshi to continue operating in NY when NY tried to crack down on it. Donald Trump Jr. is a paid advisor for Kalshi. The US Government's conservative leaders are ignoring states' rights in order to personally profit, using Kalshi as a tool. > this will end up at SCOTUS, and everything until then just doesn't matter Unless Congress passes a law so SCOTUS doesn't have to. We can't keep pretending it's normal for SCOTUS to decide everything about our society. If Congress won't do its job, why do we have them?
- jfengel 19d ago
  We have them because the Founders thought it was a good idea. Then they thought it was a good idea to have two houses with different criteria, giving two chances to quash legislation. Plus the veto. Plus the Supreme Court (whose job they left almost completely undefined, so they made up a job description). So we have them because we can't get rid of them. But they are practically useless. They can usually manage the bare minimum of reauthorizing the thing they said last year. Then they can rename a few post offices, have some grandstanding hearings, and then go home to campaign for reelection.
  - dmix 19d ago
    That’s the history of separation of powers, the judiciary is the final check in the loop. It doesn’t fully explain why Congress has allowed the expansion of executive power for nearly a century, resulting in more and more major issues being pushed to the Supreme Court. That’s not to say states have lost power, their reach has also grown exponentially far outpacing even the federal in terms of number of workers and written law. It’s mostly just Congress has become self satisfied on being negotiators for spending the most money in their own states, while ignoring the minimization of their role in the greater power dynamic. Everyone makes a big deal about president as the signal but IMO if you take a 10,000-foot view of US history Congress neutering itself is the real long term narrative. Including most major current populist issues like immigration, debt, war, abortion, etc. They are hands off unless it involves new spending.
    - vkou 19d ago
      > It doesn’t fully explain why Congress has allowed the expansion of executive power for nearly a century, resulting in more and more major issues being pushed to the Supreme Court. It's because the US is a presidential republic with no concept of a non-confidence vote. This makes the sitting head of the party ~impossible to remove, and when government fails to reach consensus, instead of... Having an election, and let the voters decide, power de-facto ends up in the hands of the executive.
      - reliabilityguy 19d ago
        I am not sure a vote of non-confidence would have helped here — there are only two parties.
        deleted 19d ago
        [deleted]
        skissane 19d ago
        > I am not sure a vote of non-confidence would have helped here — there are only two parties. But why are there only two parties? The rest of the Anglosphere–Australia, Canada, Ireland, New Zealand, the UK–have multiparty systems–some are more multiparty than others, but none of them have the hard two-party system that the US has, in which third parties have a very marginal role (not completely marginal – e.g. in a close election, the decisions of New York's Conservative and Working Families parties can make a real difference to the outcome – but certainly at a national level third parties have no real power in the US.) First-past-the-post is a popular explanation, but it can't by itself explain it, since the UK and Canada use it, yet lack a US-style hard two party system (and with the rise of the Reform party in the UK, the British system is becoming less two-party than it has been in a long time.)
- fooey 19d ago
  absolutely nothing in going to happen in the US congress until 2029 we're essentially one year of three into one of the least effective lame duck legislative bodies we'll ever see
- DannyBee 19d ago
  Thankfully, the CFTC can't actually order Kalshi to continue operating in NY despite being in violation of NY law. They have no authority to override any judge's order/etc, and at least so far, have not pretended they do. As for me, i've never pretended it's either normal or desired for the courts to make policy, whether congress is dysfunctional or not. Among other things. My comment was basically pointing out that the current supreme court seems perfectly willing to throw out decades of settled law on an ideological whim, and actually, for that matter, happily interpret very clear congressional statutes in very odd ways. So your comment there is mistargeted, at least as applied to me.
  - tmp10423288442 19d ago
    > the current supreme court seems perfectly willing to throw out decades of settled law on an ideological whim, and actually, for that matter, happily interpret very clear congressional statutes in very odd ways Fortunately or unfortunately, the Supreme Court has always been willing to do that. This court has been overruling decisions of the Warren Court, just as the Warren Court overruled decisions from the Lochner Era.
    - watwut 19d ago
      Overruling bad decisions is not a problem. Following is a problem: > decades of settled law on an ideological whim, and actually, for that matter, happily interpret very clear congressional statutes in very odd ways This court is not like the previos one. Things are not the same
- bjt 19d ago
  > We can't keep pretending it's normal for SCOTUS to decide everything about our society. That's not what this is. As the 9th Circuit points out, states already have quite extensive laws about gambling. We don't need Congress to step in to either reinforce or displace them. The courts are doing their job by ruling on existing laws.
- gamblor956 18d ago
  Unless Congress passes a law so SCOTUS doesn't have to. Congress doesn't need to pass a new law. Federal gambling laws were not removed from the books when Congress created the CFTC because they did not intend for gambling transactions to be regulated by the CFTC. (Federal gambling laws were not struck down until 2018, by SCOTUS, on First Amendment grounds. Yes, the decision was written by one of the justices known to have accepted gifts from companies doing business before the Court.)
runako 19d ago
> Kalshi is just hoping to be treated like Uber was. This is not a bad strategy for a company in our asymmetric regulatory environment. Fortunes were made in crypto on exactly this one-way bet. Go on breaking the law until you get a favorable judge/Congress. Nobody is going to jail (we don't really do that anymore), you might pay a fine. Every once in a while you'll have change the app a little to sort of comply with a judicial order. There's practically no downside to this strategy.
- vkou 19d ago
  What kind of society do you get when the positive EV play is to always break the law first, litigate later?
  - brendoelfrendo 19d ago
    If you're in the USA, you can see for yourself by looking out the window. It's not great!
  - kotaKat 19d ago
    Quite a few people (and countries) subscribe to the “it isn’t a war crime the first time” model.
  - bfdm 18d ago
    A broken one, evidently.
- highfrequency 19d ago
  > Go on breaking the law until you get a favorable judge/Congress. Nobody is going to jail (we don't really do that anymore), you might pay a fine. Binance, FTX, BitMex, Silk Road founders all went to jail - it’s a huge coin flip.
  - grim_io 19d ago
    It was a different time.
  - 19d ago
ButlerianJihad 19d ago
> That will be a coin flip I call $50 on Tails!
- inigyou 19d ago
  I call $50 on Whonix
- echelon_musk 19d ago
  Seems like something there could be a prediction market for on Kalshi.
- mlrtime 19d ago
  I'm selling options on ButlerianJihad losing, expiration in 1 year for $25. Who wants one?
expel5631 19d ago
[dead]
msandford 18d ago
Isn't this also more unique since they're trading futures contracts vs whatever a traditional sports bet is? I thought it was kind of a clever end run around the law where taking down their gig would also mean that you have to attack commodities futures contracts as well and that the Congress would be loathe to do that lest they accidentally outlaw the stock market. When I say "clever" I don't mean"good" I mean "crafty". You acknowledge someone has game without condoning their behavior or extolling it as virtuous.
- RunSet 18d ago
  https://www.merriam-webster.com/dictionary/low%20cunning https://www.merriam-webster.com/dictionary/low%20cunning
- gamblor956 18d ago
  It's not clever at all. Congress didn't eliminate the federal prohibition on sports gambling when they created the CFTC. Ergo, it is clear that Congress did not intend for sports gambling transactions to be within the jurisdiction of the CFTC. The only clever thing they did was putting members of the Trump family on their board.
dzonga 18d ago
wish more lawyers broke down things simply like you did. unfortunately - as you pointed out the outcome of the cases being a coin flip at the supreme court is the tragedy in all of this.

0xbadcafebee 19d ago

> because Kalshi doesn't want to follow the actual law Correction: because the federal government doesn't want Kalshi to follow the actual law. CFTC ordered Kalshi to continue operating in NY when NY tried to crack down on it. Donald Trump Jr. is a paid advisor for Kalshi. The US Government's conservative leaders are ignoring states' rights in order to personally profit, using Kalshi as a tool. > this will end up at SCOTUS, and everything until then just doesn't matter Unless Congress passes a law so SCOTUS doesn't have to. We can't keep pretending it's normal for SCOTUS to decide everything about our society. If Congress won't do its job, why do we have them?

jfengel 19d ago
We have them because the Founders thought it was a good idea. Then they thought it was a good idea to have two houses with different criteria, giving two chances to quash legislation. Plus the veto. Plus the Supreme Court (whose job they left almost completely undefined, so they made up a job description). So we have them because we can't get rid of them. But they are practically useless. They can usually manage the bare minimum of reauthorizing the thing they said last year. Then they can rename a few post offices, have some grandstanding hearings, and then go home to campaign for reelection.
- dmix 19d ago
  That’s the history of separation of powers, the judiciary is the final check in the loop. It doesn’t fully explain why Congress has allowed the expansion of executive power for nearly a century, resulting in more and more major issues being pushed to the Supreme Court. That’s not to say states have lost power, their reach has also grown exponentially far outpacing even the federal in terms of number of workers and written law. It’s mostly just Congress has become self satisfied on being negotiators for spending the most money in their own states, while ignoring the minimization of their role in the greater power dynamic. Everyone makes a big deal about president as the signal but IMO if you take a 10,000-foot view of US history Congress neutering itself is the real long term narrative. Including most major current populist issues like immigration, debt, war, abortion, etc. They are hands off unless it involves new spending.
  - vkou 19d ago
    > It doesn’t fully explain why Congress has allowed the expansion of executive power for nearly a century, resulting in more and more major issues being pushed to the Supreme Court. It's because the US is a presidential republic with no concept of a non-confidence vote. This makes the sitting head of the party ~impossible to remove, and when government fails to reach consensus, instead of... Having an election, and let the voters decide, power de-facto ends up in the hands of the executive.
    - reliabilityguy 19d ago
      I am not sure a vote of non-confidence would have helped here — there are only two parties.
      - deleted 19d ago
        [deleted]
      - skissane 19d ago
        > I am not sure a vote of non-confidence would have helped here — there are only two parties. But why are there only two parties? The rest of the Anglosphere–Australia, Canada, Ireland, New Zealand, the UK–have multiparty systems–some are more multiparty than others, but none of them have the hard two-party system that the US has, in which third parties have a very marginal role (not completely marginal – e.g. in a close election, the decisions of New York's Conservative and Working Families parties can make a real difference to the outcome – but certainly at a national level third parties have no real power in the US.) First-past-the-post is a popular explanation, but it can't by itself explain it, since the UK and Canada use it, yet lack a US-style hard two party system (and with the rise of the Reform party in the UK, the British system is becoming less two-party than it has been in a long time.)
fooey 19d ago
absolutely nothing in going to happen in the US congress until 2029 we're essentially one year of three into one of the least effective lame duck legislative bodies we'll ever see
DannyBee 19d ago
Thankfully, the CFTC can't actually order Kalshi to continue operating in NY despite being in violation of NY law. They have no authority to override any judge's order/etc, and at least so far, have not pretended they do. As for me, i've never pretended it's either normal or desired for the courts to make policy, whether congress is dysfunctional or not. Among other things. My comment was basically pointing out that the current supreme court seems perfectly willing to throw out decades of settled law on an ideological whim, and actually, for that matter, happily interpret very clear congressional statutes in very odd ways. So your comment there is mistargeted, at least as applied to me.
- tmp10423288442 19d ago
  > the current supreme court seems perfectly willing to throw out decades of settled law on an ideological whim, and actually, for that matter, happily interpret very clear congressional statutes in very odd ways Fortunately or unfortunately, the Supreme Court has always been willing to do that. This court has been overruling decisions of the Warren Court, just as the Warren Court overruled decisions from the Lochner Era.
  - watwut 19d ago
    Overruling bad decisions is not a problem. Following is a problem: > decades of settled law on an ideological whim, and actually, for that matter, happily interpret very clear congressional statutes in very odd ways This court is not like the previos one. Things are not the same
bjt 19d ago
> We can't keep pretending it's normal for SCOTUS to decide everything about our society. That's not what this is. As the 9th Circuit points out, states already have quite extensive laws about gambling. We don't need Congress to step in to either reinforce or displace them. The courts are doing their job by ruling on existing laws.
gamblor956 18d ago
Unless Congress passes a law so SCOTUS doesn't have to. Congress doesn't need to pass a new law. Federal gambling laws were not removed from the books when Congress created the CFTC because they did not intend for gambling transactions to be regulated by the CFTC. (Federal gambling laws were not struck down until 2018, by SCOTUS, on First Amendment grounds. Yes, the decision was written by one of the justices known to have accepted gifts from companies doing business before the Court.)

runako 19d ago

> Kalshi is just hoping to be treated like Uber was. This is not a bad strategy for a company in our asymmetric regulatory environment. Fortunes were made in crypto on exactly this one-way bet. Go on breaking the law until you get a favorable judge/Congress. Nobody is going to jail (we don't really do that anymore), you might pay a fine. Every once in a while you'll have change the app a little to sort of comply with a judicial order. There's practically no downside to this strategy.

vkou 19d ago
What kind of society do you get when the positive EV play is to always break the law first, litigate later?
- brendoelfrendo 19d ago
  If you're in the USA, you can see for yourself by looking out the window. It's not great!
- kotaKat 19d ago
  Quite a few people (and countries) subscribe to the “it isn’t a war crime the first time” model.
- bfdm 18d ago
  A broken one, evidently.
highfrequency 19d ago
> Go on breaking the law until you get a favorable judge/Congress. Nobody is going to jail (we don't really do that anymore), you might pay a fine. Binance, FTX, BitMex, Silk Road founders all went to jail - it’s a huge coin flip.
- grim_io 19d ago
  It was a different time.
- 19d ago

ButlerianJihad 19d ago

> That will be a coin flip I call $50 on Tails!

inigyou 19d ago
I call $50 on Whonix
echelon_musk 19d ago
Seems like something there could be a prediction market for on Kalshi.
mlrtime 19d ago
I'm selling options on ButlerianJihad losing, expiration in 1 year for $25. Who wants one?

expel5631 19d ago

[dead]

msandford 18d ago

Isn't this also more unique since they're trading futures contracts vs whatever a traditional sports bet is? I thought it was kind of a clever end run around the law where taking down their gig would also mean that you have to attack commodities futures contracts as well and that the Congress would be loathe to do that lest they accidentally outlaw the stock market. When I say "clever" I don't mean"good" I mean "crafty". You acknowledge someone has game without condoning their behavior or extolling it as virtuous.

RunSet 18d ago
https://www.merriam-webster.com/dictionary/low%20cunning https://www.merriam-webster.com/dictionary/low%20cunning
gamblor956 18d ago
It's not clever at all. Congress didn't eliminate the federal prohibition on sports gambling when they created the CFTC. Ergo, it is clear that Congress did not intend for sports gambling transactions to be within the jurisdiction of the CFTC. The only clever thing they did was putting members of the Trump family on their board.

dzonga 18d ago

wish more lawyers broke down things simply like you did. unfortunately - as you pointed out the outcome of the cases being a coin flip at the supreme court is the tragedy in all of this.